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Commercial Deals

Pretium Partners Launches Litigation Funding Group

Pretium Partners LLC is an investment management firm specializing in corporate, residential, and structured credit. It has recently announced the formation of a new investment group focusing on third-party funding. Reuters reports that Pretium has around $26 billion in assets under management. It’s newly formed ‘legal opportunities team’ is expected to work with law firms and businesses to fund complex commercial disputes, IP and patent litigation, arbitrations, insolvency, and other common areas of focus. Matthew Cantor, previously GC for Lehman Brothers, will lead the six-person team. Cantor joined Pretium in June 2020. Chad (Charles) Schmerler has been announced as the head of litigation finance. Together, team members have experience in legal risk monetization, legal finance, IP, forensic accounting, and damages analysis.
Commercial Regulatory Issues

EU Parliament Considers Increased Litigation Funding Legislation

This past June, the European Parliament’s Legal Affairs Committee published recommendations for the European Commission. This draft report is being discussed and debated by the Economic Affairs Committee before being discussed in Parliament in November. If Parliament adopts the draft report, the next step would be for the European Commission to draft new legislative proposals. Pinsent Masons details that while the committee report acknowledges the value of third-party funding, it also cautions against funders profiting at the expense of claimants. The draft is reportedly intended to regulate third-party legal funding before it gains traction across the EU. Notably, the draft report describes third-party legal funding as a way to make a profit. Increased access to justice, the report claims, is merely a by-product of the practice. This cynical mindset could surely be countered by the many people who have obtained justice thanks to a funder that believed in their case. The main proposals of the draft report include issues already addressed by professional organizations like the IFLA. These include:
  • Ensuring that funders do not supersede the wishes of claimants
  • Employing safeguards against conflicts of interest
Other suggested regulations are less welcome by many funders, and have been debated in other jurisdictions. These include:
  • Licensing systems similar to what Australia has mandated
  • Requirements regarding capital minimums and security for costs
  • Fee caps
  • Disclosure
The German Federal Bar welcomed most of the suggestions in the draft report. BRAK stated its expectation that litigation funding will become increasingly influential in Germany, and should therefore be well-regulated. Upon receiving the draft report, BRAK suggested extending the rules to include proceedings that happen out-of-court. Class actions are of particular interest to those planning increased regulation. Collective actions are on the rise in many jurisdictions, which is not welcome news in the business world.
Case Developments Commercial

Costs Awarded to Volkswagen in Takata Airbag Action

A recent class action against Volkswagen Group Australia has been dismissed. Costs have been awarded to the car manufacturer and will be paid by the third-party litigation funder for the plaintiffs. Car Expert explains that the lead claimant, Professor Phillip Dwyer, was unable to establish damages resulting from the installation of a Takata airbag, nor could he demonstrate that the vehicle was of unacceptable quality at the time of purchase. As such, the case was dismissed. Buyers received recall notices requiring that airbags be replaced within six years. This led Dwyer to conclude that his car was unsafe and that he was owed compensation of about $15,000. Justice Stevenson determined that there were no financial losses and that the Dwyers continued to drive their car without incident. The airbags in question are currently installed in over 20 million cars around the world. The litigation funder for the plaintiffs is now on the hook for the costs award issued by the court. 
Case Developments Commercial

Seqwater Case Overturned as Omni Bridgeway Stock Takes Hit

Omni Bridgeway's share price fell subsequent to an appeals judgment against Seqwater. The ruling overturned a 2019 judgment against the dam management company. The original ruling determined that Seqwater was liable for half of the compensation claims from floods in early 2011. Stockhead details that another appeal could be imminent. In the meantime, the case in question amounted to 4% of the company’s litigation assets—not counting Seqwater’s costs, which are as yet uncalculated. Omni Bridgeway's share price fell by 8%, which represents an AU $90 million decrease in market capitalization. CEO Andrew Saker affirms that while not devastating, the outcome was certainly less than ideal.
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Case Developments Commercial

TikTok Again Accused of Violating Privacy Laws

A third Demark-based foundation has filed a case against TikTok media group over data they claim was harvested illegally. The suit impacted about 4.5 million Dutch users across all age demographics. Dutch News reports that the suit alleges that the TikTok app profits from detailed user information on a platform where user content and ads are virtually indistinguishable. The company is accused of seeking out countries with less rigorous standards for data protection—like the US or China. The case is being funded by IVO Capital, and led by Stichting, Massaschade & Consument—an independent non-profit legal organization.
Commercial Deals

Gately Announces GBP 20 Million Litigation Funding Facility

Gately, the first law firm to list publicly in the UK, recently announced a GBP 20 million litigation funding arm. Expected to begin in early 2022, the funding arm will specialize in claims related to insolvency, investor and shareholder disputes, fraud, and asset protection and recovery. Gately PLC has been a dominant force in insolvency litigation. It makes sense that their litigation funding facility will have a similar focus. Gately services domestic and international clients in a wide swath of jurisdictions including Russia and CIS, Gibraltar, Cyprus, BVI, and the Cayman Islands, among others. The firm's funding process will begin with a review of the case to determine its viability for funding. By providing non-recourse funding, Gately will enable companies to pursue meritorious litigation with no upfront cost to the company. Funders are paid from the results of a successful verdict or settlement. If the case is unsuccessful, funders may lose their investment, but the business does not suffer the loss.
Case Developments Commercial

Omni Bridgeway Files Appeal on Behalf of 1,000 Halifax Victims

Leading legal funder Omni Bridgeway recently announced that it is funding appeals over judgments against Halifax Investment services Pty Ltd, and another Halifax entity—both currently in liquidation. NZ Herald revealed that Danielle Funston, Maddocks Lawyers insolvency specialist, will be the lead attorney in the appeal. The result might impact more than 1,000 category 1 investors, which covers at least AU $82 million in investments, as of the time Halifax went into insolvency. The appeal will focus on whether the courts should have concluded that the liquidators were correct in valuing investor entitlements as of the administration date. 
Case Developments Commercial

UK Supreme Court Ruling Could Damage Enforceability of Follower Notice Penalties

Follower Notices have been in use since 2014, and refer to a notification given to someone who has used an “avoidance scheme” that was determined to be ineffective by a case against another user. This gives taxpayers an opportunity to adjust or amend their tax filings. Her Majesty’s Revenue and Customs (HMRC) issues these notices frequently, which is considered controversial for a variety of reasons. Field Fisher explains that Follower Notices are sometimes applied to situations wherein the link between the test case and the person being notified is highly tenuous. One case in particular, R Haworth v Revenue and Customs Comrs [2021] UKSC 25 could invalidate all Follower Notices issued by the HMRC since 2014. According to a Freedom of Information request, about 1.330 Follower Notices have been issued since this regime began in 2014, totaling about GBP 45 million. Not only that, but at least 13,000 people reportedly gave up on their tax appeal cases due to a Follower Notice that may not even be correctly applied, let alone legally enforceable. Ideally, anyone who has received a Follower Notice should contact their legal counsel. According to HMRC, a Follower Notice tells the subject that they may be liable for penalties of up to 50% of the tax dispute if their return isn’t amended or the dispute settled. If that seems threatening, it may be because it is. In the Haworth decision, courts specifically considered the word “would” as it pertains to the notices. HMRC asserted that by “would,” they meant “would likely.” Rather like the difference between “Yes,” and “Possibly,” which most people would agree is significant. This ruling calls the appropriateness of all issued Follower Notices into question. A group action is being assembled. Impacted parties are encouraged to contact Feldfisher attorneys George Gillham and Matthew Sharp for additional information.
Announcements Commercial Fundraising

Notice Of Investor Event Date

Burford Capital Limited, the leading global finance and asset management firm focused on law, today announces that it will hold an investor event on Tuesday November 2, 2021 at 10.00am-12.30pm EDT / 2.00-4.30pm GMT / 3.00-5.30pm CET. The investor event will be hosted by Christopher Bogart, Chief Executive Officer and Co-Founder, and Jonathan Molot, Chief Investment Officer and Co-Founder, as well as other members of the senior management team. For institutional investors and analysts, the event will take place in person at the New York Stock Exchange, followed by a reception. There will be a simultaneous online real-time video webcast, from which registered participants will have the functional capability to put questions to the management team. Further details, including registration and participation, will be announced in due course. About Burford Capital
Burford Capital is the leading global finance and asset management firm focused on law. Its businesses include litigation finance and risk management, asset recovery and a wide range of legal finance and advisory activities. Burford is publicly traded on the New York Stock Exchange (NYSE: BUR) and the London Stock Exchange (LSE: BUR), and it works with companies and law firms around the world from its principal offices in New York, London, Chicago, Washington, Singapore and Sydney. For more information, please visit www.burfordcapital.com. This communication shall not constitute an offer to sell or the solicitation of an offer to buy any ordinary shares or other securities of Burford. This release does not constitute an offer of any Burford fund. Burford Capital Investment Management LLC ("BCIM"), which acts as the fund manager of all Burford funds, is registered as an investment adviser with the U.S. Securities and Exchange Commission. The information provided herein is for informational purposes only. Past performance is not indicative of future results. The information contained herein is not, and should not be construed as, an offer to sell or the solicitation of an offer to buy any securities (including, without limitation, interests or shares in the funds). Any such offer or solicitation may be made only by means of a final confidential Private Placement Memorandum and other offering documents. Forward-looking statements
This announcement contains "forward-looking statements" within the meaning of Section 21E of the US Securities Exchange Act of 1934 regarding assumptions, expectations, projections, intentions and beliefs about future events. These statements are intended as "forward-looking statements". In some cases, predictive, future-tense or forward-looking words such as "aim", "anticipate", "believe", "continue", "could", "estimate", "expect", "forecast", "guidance", "intend", "may", "plan", "potential", "predict", "projected", "should" or "will" or the negative of such terms or other comparable terminology are intended to identify forward-looking statements, but are not the exclusive means of identifying such statements. In addition, we and our representatives may from time to time make other oral or written statements which are forward-looking statements, including in our periodic reports that we file with the US Securities and Exchange Commission, other information sent to our security holders, and other written materials. By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors because they relate to events and depend on circumstances that may or may not occur in the future. We caution you that forward-looking statements are not guarantees of future performance and are based on  numerous assumptions and that our actual results of operations, including our financial condition and liquidity and the development of the industry in which we operate, may differ materially from (and be more negative than) those made in, or suggested by, the forward-looking statements contained in this announcement. Significant factors that may cause actual results to differ from those we expect include those discussed under "Risk Factors" in our Annual Report on Form 20-F filed with the US Securities and Exchange Commission on March 24, 2021. In addition, even if our results of operations, including our financial condition and liquidity and the development of the industry in which we operate, are consistent with the forward-looking statements contained in this announcement, those results or developments may not be indicative of results or developments in subsequent periods. Except as required by law, we undertake no obligation to update or revise the forward-looking statements contained in this announcement, whether as a result of new information, future events, a change in our views or expectations or otherwise. SOURCE: Burford Capital
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